Gold Soars as US Shutdown Enters Day 8; French Premier Optimistic on Resolving Political Crisis

Bloomberg Audio Studios, Podcasts, Radio News.
Good morning, I'm Nathan Hager and I'm Karen Moscow. Here
are the stories we're following today.
Karen, we begin on day eight of the federal government shutdown,
and the White House is ramping up the pressure on Democrats.
President Trump is floating the idea of blocking back pay
for some federal workers when the government reopens.
For the most part, we're going to take care of
our people.
There are some people that really don't deserve to be
taken care of, and we'll take care of them in
a different way.
The President spoke from the Oval Office after the White
House Budget Office drafted a memo saying workers are not
guaranteed compensation during a shutdown. We get more from Bloomberg
sterk Wallbank.
There is a substantial amount of question about whether or
not that's something he can actually do, but that is
the threat that's there, and hanging over all of this
is a threat from russ Vote, the O and B
Director to me be rather than furlough federal workers which
they are currently furloughed, to actually go through with permanent
job cuts, trying to put pressure on Democrats.
That's Bloomberg's Derek Wallbank. In the meantime, the shutdowns starting
to have a real world impact outside the Belwegh. Flights
at Chicago O'Hare and Dallas Fort Worth airports were delayed
by at least a half hour last night due to
staffing shortages. Air traffic controllers and other essential staff are
still working at the nation's airports, just without pay.
And France, Nathan the countdown underway to salvage the French
government outgoing Prime Minister sebashedin Lacorneu expressed optimism that an
agreement can be reached to allow the formation of a
new government without fully endorsing a new proposal to rethink
a controversial pension law as demanded by the Socialists. Bloombery
Daybreak anchor Stephen Carroll is in Paris and has the
very latest developments.
The centrist on center right parties that he spoke to
yesterday have a willingness to agree on a budget by
the first of December. He says, the conversation was steering
further away from a dissolution of the parliament. They've agreed
that the budget must allow France to advance and to
reduce the deficit to below five percent next year. That's
interesting because the previous budget target was four point seven
percent next year, so perhaps an indication of some of
the willingness and what's being discussed in terms of changes
to spending plans.
Now.
He's going into discussions with the left wing parties today,
so Astilla corn Who says he'll be asking and what
concessions they're willing to make to try and support a
budget plan as well, and he talked more broadly about
the risks of what this crisis means to the image
of France too, to the international place on the international
stage that France holds as well. But the message from
the first day of talks is is that they are
working towards a budget agreement. They're working away from the
idea of calling fresh National Assembly elections for Emmanuel Macron's
givens to Astilla corn who until this evening to try
and come up with a plan. I will be waiting
to see what the next update brings.
And Bloomber Stephen Carol notes that French bonds extended in advance.
As Locarno spoke, they yield on ten year bonds fell
five basis points to three point five two percent, the
lowest since Friday.
Now, Karen, let's get to the latest DOUN efforts for
peace in the Middle East. Teams from the US, CATTER
and Israel are gathering in Egypt for final negotiations to
end the war in Gaza. Israeli opposition leader Yarral Lapede
says he is hoping for an end to the conflict, a.
War that is going nowhere, hostages that are slowly dying,
and of course the suffering Gaza that everybody in his
right mind cares about. Children should not die and drops wars.
So for everybody's sake, we pray for this town.
Israeli opposition leader Yarl Lapede made those comments to Sky News.
A Hama spokesperson says a permanent ceasefire and withdrawal of
Israeli troops from Gaza must be central to a deal.
We turn now to the markets, Nathan, where gold is
continuing its record run. It's smashed through four thousand dollars,
announced for the first time, concerns over the US economy
and a government shutdown, and writing fresh momentum to the rally.
Bloomberg Markets Executive editor Paul Dobson has more in the
historical run.
Fifty percent just this year alone is a pretty impressive statistic.
That's against the US dollar, and when you sort of
look at how that compares with history, it's the best
annual gain since the nineteen seventies. And it's not just
that that's kind of noteworthy here, it's also the sort
of pace at which we're gaining in sort of longer
term history. If you think about it, we only breached
one thousand dollars an ounce after the financial crisis, two
thousand during the COVID pandemic. But we've gone from three
thousand to four thousand just since March to this month,
So you know, we're really stepping up in terms of
that sort of big number rate of change.
And that's Bloomberg Markets Executive editor Paul Dobson taking a
look at comas Gold right now. It's up one and
a third percent, up more than fifty five dollars at
four fifty nine dollars an ounce.
Karen, we have new developments this morning involving Elon Musk's
push into artificial intelligence. The billionaire's startup XAI is raising
more than initially planned. Let's get the details from Bloomberg's Genus.
Cervetti, Bloomberg News has learned Musk is tapping backers including
in Vidia, to lift the ongoing funding ground to twenty billion.
Sources say the financing includes equity and debt in a
special purpose vehicle that will buy in Vidia processors and
rent them to Xai for use in its Colossus two project.
Nvidia is investing as much as two billion in the
equity portion of the transaction, a strategy that helps accelerate
its customers AI investments. The massive financing is just the
latest for the AI industry. Earlier this week, OpenAI announced
a deal to use advanced micro devices chips over multiple years.
Meta Platforms has inked several multi billion dollar deals in
the past few months, including a twenty nine billion dollar
financing package for data centers, and Oracle also raised a
thirty eight billion dollars debt package for its infrastructure. Gina
Cervetti Bloomberg Radio, All.
Right, Gina, thank you well. Jamie Diamond is weighing in
on the AI boom, He says JP Morgan Chase spent
two billion dollars a year on developing artificial intelligence technology
and saves about this same amount annually from the investment.
Diamond tells Bloomberg's Tom mackenzie that he celebrates the opportunities
offered by AI, even if it eliminates some jobs.
We have two thousand people doing it, spend two billion
dollars a year on it. It affects everything risk, fraud, marketing,
idea generation, customer service, and it's kind of the tip
of the iceberg. And so you know, we're deploying it.
Every time we meet us a business, we ask what
are you doing? What are you doing to serve your people?
Why can you do better? What are somebody else doing?
So we're freely deploying it and safely.
And a letter to shareholders last year, Diamond the likened
AI technology to the printing press, the steam engine, electricity, computing,
and the internet. Get the full conversation with JP Morgan
Chase CEO Jamie Diamond on the Bloomberg Podcast channel on YouTube.
And finally, Karen Cristiano Ronaldo is soccer's first billionaire. His
net worth now stands at one point four billion dollars
on the Bloomberg Billionaires Index. The Portuguese player reached the
milestone after a lucrative contract extension with Saudi Arabian team
Al Nasa reportedly worth four hundred million, but Bloomberg Portugal
bureau chief Sofia Jorte Costa says Ronaldo's move to the
Middle East was controversial.
At the time.
A lot of people were criticizing that decision because you know,
he was going from Manchester United and playing at really
top level football to a very unknown league. Even in
Saudi Arabia wasn't the most successful team.
And despite endorsement deals with brands including Nike and Armani,
Bloomberg Sofia Horta a Costa says Ronaldo's wealth primarily comes
from his playing career.
Time now for a look at some of the other
stories making news in New York and around the world,
and for that we'retowned by Bloomberg's Michael Barr Michael.
Good Morning, Karen. Attorney General Pam Bondi clash with the
Democratic Senators during a contentious hearing on a wide range
of issues. In an exchange with Senator Dick Durbin of Illinois,
Bondi was asked about any conversations that she may have
had with the White House about deploying the National Guard
to democratic run cities.
I wish you loved Chicago as much as you hate
President Trump. We're there to help make America safe and
Illinois safe, whether or not you want to.
Ag Bondi was also questioned about the Jeffrey Epstein files,
basically saying that there is no evidence that would implicate
potential co conspirators. Matt Van Epps, a former commissioner in
Tennessee Governor Bill Lee's administration, as one a crowded Republican
primary in the special election to replace former GOP Congressman
Mark Green, who left office this summer. Van Epps clinched
Tuesday's victory with fifty one point six percent after an
endorsement from President Trump. In the Democratic primary, state Representative
Apton ben won a four way contest with almost twenty
eight percent, and we'll face Vaneps in the general election
December second. A truck driver has filed a lawsuit against
former New York Jets quarterback Mark Sanchez and Fox Corporation
following a bloody fight police they was started by Sanchez
outside in Indianapolis hotel. The altercation left sixty nine year
old Perry Toll with several injuries. Towell also stabbed Sanchez
during the fight lead Prosecutor Ryan Mears.
Certainly the description from the victim would indicated that she
was of the belief that the person that he had
the confrontation, which was very much intoxicated.
Prosecutor Ryan Mears also said Tuesday, Sanchez faces a felony
battery charge and several misdemeanors. Sanchez was in Indianapolis for
Fox's coverage of a football game. Global News twenty four
hours a day and whenever you want it with Bloomberg
News Now Michael Barr and this is is Bloomberg.
Karen, Thanks Michael.
Time now for our Bloomberg Sports updating. For that we
bring in John Stashauer.
Thanks Daron. The Yankees were in big trouble, trailing Toronto
two games to none. On The blue Jays lead game three,
six to one, but the Yanks rallied Aaron Judge at
a game dying three run Homer Jazz Chisholm a go
ahead solo shot Yanks one ninety six. The Blue Jays
still lead the series to to one. Seattle one eight
four at Detroit for a two to one series lead.
Forty year old Joe Flacco traded from one AFC Central
team in Ohio to another goes from Cleveland to Cincinnati.
The Bengals loss quarterback Joe Burrow to injury. That's to
a Bloomberg Sports update.
Stay with us more from Bloomberg day Break coming up
after this.
Coast to coast on Bloomberg Radio, nationwide on Sirius XM,
and around the world on Bloomberg dot Com and the
Bloomberg Business Appum. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager. As the French political crisis
this continues. France's caretaker prime minister now has just hours
to find a solution to his country's budget and government woes,
and as he had just closer to President Emanuel Macrome's deadline,
Sebastian Lacornel is sounding optimistic.
That there is a will to have for France a
budget before the thirty first of December this year, and
this will creates a movement that steers us further away
from the dissolution of parliament.
That was Prime Minister Lacorneo speaking through an interpreter this morning,
and for the very latest, we were joined in Paris
once again by Bloomberg Daybreak. Europe Banker Stephen Carroll so Stephen,
there's a will to get a budget by the end
of the year, but isn't the deadline this month?
Good morning, Good.
Morning, Nathan. Yeah, I mean, weren't the latest twist of this,
but a note of optimism coming from Sebastia Nicrneo. He
was speaking before part of what is perhaps the most
crucial part of his negotiations. He was going in to
talk to the center left Socialist Party. They're seen as
being the key to the way out of this cry
for la Cournou to build a broader consensus potentially around
a budget plan, and that optimism that he talked about
of having the centrist and center right parties on board
to try and pass a budget and move away from
the idea of fresh National Assembly elections would be something
that has given markets a bit of a boost. We've
seen a reaction on the cat carent In powis getting
a bit of a spike, and the advance in government
bond deals also continuing. We're seeing the drop down about
four basis points on the tenure and the spread with
Germany narrowing as well. So a sense from Sebastiana Cornu
that things went well with his discussions yesterday, But I
would point out those are his existing partners. What he
has to get the Socialists to agreeto he said to
be looking for concessions. He's meeting a whole range of
left wing parties today is what exactly they're willing to
agree to. And a lot of the focus now in
the conversation has been around the question of retirement reforms
and whether the controversial pension reforms passed in France might
actually get suspended as part of some sort of deal
with the Socialist Party.
And that raises the question about whether those kinds of
reforms would be agreed to by some of the parties
on the right wing exactly.
And this is where things get extremely complicated, and we
look at the potential for a split in the existing
coalition as well. So Sebastian Leacanou is caught in a
sort of a game of three dimensional chess where he's
trying to bring new allies on side without losing his
existing ones. But it is interesting to point out that
the idea of suspending the pension reforms came from the
person who was responsible for bringing them through parliament, the
former Prime Minister Elizabeth Bohn. Again, another indication of how
even in Macron's own party we're seeing a sort of
distancing from some of the president's key reforms as well.
Sebastian Leacorneu is going to speak in an interview on
French television this evening. That's around the time we're expecting
him to be able to have told the president whether
or not there is a way out of this crisis.
The hours are ticking down, the meetings are continuing, and
the pressure is on for Sebastian Lecanu.
At the same time, as you mentioned, we are seeing
some relief in the mark, but with some of President
mccron's traditional allies sort of distancing themselves from him in
ways that we've been talking about since yesterday, does that
keep some of the political pressure on him. He's been
facing calls from some of his past allies to resign.
Yeah, that's right, and some of those calls are ones
that they've been making for quite some time. But the
issue now is that Emmanuel Macron looks very unlikely to
try and resign, much more likely that there would be
National Assembly elections, if any at all. And I suppose
the messagement of Bastian Lacoran, who seems to indicate that
elections are looking like a more distant prospect this morning
on the market reaction, though, I would point out that
if they were to suspend the pension reforms, that could
be a real impact on markets. Conversations we've been having
with the likes of Christopher Dembick from Pictay this morning
talking about it being the biggest risk to Franci's fiscal outlook, which,
as we know, is the origin of this whole crisis
to begin with, is the fact that they couldn't agree
on a budget to reduce the deficit. And if you
add to the fact that you're going to add billions
of euros of costs of pensions, if if you do
suspends those pension reforms, that's going to make the situation
even more complications.
This is Bloomberg day Break, your morning podcast on the
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